Litigation is expensive. Some costs are absolute! Court fees are non-negotiable. Third party fees such as court reporters, depositions, process servers and others continue to rise. Attorney fees are expensive. What do you do if you need to file a lawsuit against a person or business?
From time to time, civil litigation requires that a litigant sue a dissolved corporation. At common law, a corporation ceased to exist and could not sue or be sued once it had dissolved, but the California legislature abandoned these common law rules in 1929. See Penasquitos, Inc. v. Superior Court (1991) 53 Cal. 3d 1180, 1184-85.
In a strange story, an El Segundo police officer and several other named plaintiffs have initiated class action litigation against a group of surfers referred to as the Lunada Bay Boys, the City of Palos Verdes Estates, and the city's chief of police. The plaintiffs allege that "non-resident, non-local visiting beachgoers to Palos Verdes Estates have been unlawfully excluded from recreational opportunities at Palos Verdes Estates parks, beaches, and access to the ocean." Further, the plaintiffs argue that the Lunada Bay Boys, with the approval of the city, have "knowingly built and maintain an unpermitted masonry-rock-and-wood fort and seat area in violation of the California Coastal Act."
Any member of an HOA board or management company is aware the extreme costs lawsuits can pose to the association no matter how frivolous the suit is. Homeowner's associations can greatly benefit from the use of Motions for Sanctions under California's Code of Civil Procedure Section 128.7.
Last week, it was reported that a San Diego corporation, Trovagene, Inc., fired and initiated business litigation against two of its executives - CEO Antonius Schuh and CFO Stephen Zaniboni. In that lawsuit, the corporation alleges that the two executives breached their fiduciary duties by usurping a corporate opportunity that should have been presented to the corporation, but was instead taken for the personal gain of the executives. Schuh and Zaniboni deny the allegation and released a statement claiming that "there are no merits to the actions the company has taken against us." Schuh has since stated that he plans to file a lawsuit against Trovagene for wrongful termination, which he expects Zaniboni to join. Unfortunately, this sequence of events is not uncommon when the relationship between a business and an executive sours.
In a move that many people would consider questionable, Bill Cosby moved forward to use an umbrella policy tied to his homeowners' insurance to pay his legal fees and any potential judgments stemming from the litigation brought against him. This attempt, however, has been challenged by his insurance company, American International Group (AIG), who argues that Cosby isn't covered because of exclusions for sexual misconduct. In November, a federal judge ruled against AIG and found that the exclusion doesn't apply because Cosby's statements, not his alleged sexual misconduct, are the subject-matter of the pending defamation lawsuits (ten women across three states). Since then, AIG has stated that they plan to appeal the ruling and have amended their complaint citing other reasons that they shouldn't be required to cover Mr. Cosby.
In litigation with broad impact for residential real estate development and affordable housing, the Building Industry Association has appealed their loss in CBIA v. City of San Jose, 61 Cal. 4th 435 (2015), to the U. S. Supreme Court. In that decision, the California Supreme Court sided with the City of San Jose, saying that the City's affordable housing ordinance, which requires that new developments sell 15 percent of their units at reduced prices, is not an "exaction" triggering a strict analysis under the California and U.S. Constitutions, as to whether a government has taken property without compensation (takings). Instead, the ordinance and its development conditions would be analyzed like any other municipal ordinance.
While litigation and the courts are a great way to regain losses, potential clients should be prepared for a fight. Before any action is filed, an attorney should review the case to discuss what legal bases the client has for the claim, the client's likelihood of recovery, and the client's chances of prevailing. In addition to this, clients should consider several other factors before filing of the lawsuit.
Unlawful detainers are already fraught with procedural pitfalls and now due to budget cuts and an increase in "pro per" litigants, landlords face additional delays and difficulties in removing tenants that refuse to pay. The old saying "time is money" holds especially true in unlawful detainers where the amount of time a property sits with an unpaying tenant directly impacts the owner's bottom line.
The Los Angeles City Council recently changed the game for future real estate development in the city. Like most cities in California, the entitlement approval process in Los Angeles (the "City") required real estate developers to indemnify the City against any challenges to the entitlements. In Los Angeles, however, the City Attorney has typically defended the City, thus reducing the developer's financial obligation to indemnify.